Monique Ryan (Kooyong, Independent) Share this | Hansard source

Australians are under serious financial pressure. Across the country, households are finding that everyday expenses have become unaffordable. Grocery bills have risen sharply. Energy costs remain high. Insurance premiums continue to climb for homes, for cars, for health care. Renters are spending more and more of their income on their housing. Many Australians are deciding not where to put money but which essential expense they can now afford to delay. For some families, Australia's cost-of-living crisis means skipping medical or dental appointments to pay for groceries. For some pensioners, it means deciding whether or not they can afford to heat their homes through winter. For some younger Australians, it means trying to establish a degree of financial security in an economy in which stable employment no longer guarantees financial stability. It's in this context that Australian consumers are more vulnerable than ever.

When household budgets are already stretched, manipulative pricing tactics, unfair subscription arrangements and deceptive conduct can cause real harm. So it's entirely appropriate that this parliament should act where regulatory gaps in the Australian Consumer Law have allowed those practices to flourish. From the consultations on the Competition and Consumer Amendment (Unfair Trading Practices) Bill, it is clear that there is broad agreement across regulators, consumer advocates, academics and industry that there are significant gaps in our legislation, and, as the minister has pointed out, existing consumer protections have not kept pace with sophisticated methods of influencing consumer behaviour, particularly in digital markets where businesses can actively shape purchasing decisions. That's what this legislation seeks to address.

The bill introduces disclosure obligations for drip pricing, establishes clearer exit requirements for subscription contracts and creates a general prohibition on unfair trading practices. These are sensible reforms. They strengthen Australia's consumer protection framework, and I support them. But while I support the objectives and the policy intent of this bill, I cannot ignore the fact that submissions on the exposure draft to this legislation raised some very valid concerns which have not been reflected in the final drafting of this bill.

Firstly, the prohibition on unfair trading practices has been drafted very narrowly. The bill prohibits conduct only where it manipulates the consumer and causes detriment. While no-one wants prohibition so broad that it will capture ordinary commercial persuasion, many submissions to this bill cautioned that this threshold is so high that the prohibition will be difficult to enforce in practice.

Secondly, the bill addresses drip pricing by requiring transaction charges to be displayed prominently and in close proximity to the advertised base price. That is a sensible requirement, but the bill still does not require businesses to display a single total price upfront. Consumers are still expected to calculate the final cost themselves. This means that, despite this reform, the underlying commercial logic of drip pricing—which, after all, is attracting consumers with a low initial figure before progressively adding unavoidable costs—will remain largely intact.

Finally, the bill contains exit provisions to ensure that subscription cancellations are easier to find and straightforward, and that is genuinely meaningful. Signing up to something can take 30 seconds, but cancelling, as we've all experienced, can take a phone call, a waiting queue and sometimes several billing cycles. Ending that asymmetry for consumers is the right thing to do. However, the legislation also contains substantial exclusions. Leases, higher purchase agreements, childcare services, school tuition arrangements and any other additional contracts excluded by regulation will fall outside these consumer protections.

While the reforms contained in this bill are worthwhile, they're also cautious, limited and incomplete. Notably, this legislation won't commence until 1 July 2027. Every practice that this bill seeks to regulate will remain lawful for at least another 12 months before consumers receive the benefit of the protections that we should legislate this week. That is too long at a time when money for many families is as tight as it has ever been. I do welcome the minister's announcement that further legislation will be introduced later this year to extend aspects of these protections to small businesses and franchisees. Many small operators experience the same asymmetries of bargaining power and information as consumers do. I look forward to examining those reforms closely when they arrive.

The government has presented this bill as part of its response to the cost-of-living crisis. But the bill, in fact, does not materially alter the economic pressures that face Australian households. At most, it introduces important but very limited protections against some particularly exploitative commercial practices. The minister himself has described these practices as irritants, and they are. Drip pricing, manipulative interfaces and obstructive subscription cancellations do cause harm, but they're not the primary drivers of financial stresses in this country. A family paying a few extra dollars because a booking platform hid a service fee—that's frustrating. But if that family can't afford its power bills or if its grocery spend has increased by hundreds of dollars a month, or if it can't find a rental property within its budget, then it will not be materially helped by this legislation or by the government's wider competition agenda.

The minister has claimed that this bill forms part of a wider agenda to strengthen competition, improve transparency and support consumers across the country. But that broader agenda is still avoiding confronting the central issue, which has been identified repeatedly in inquiries into essential sectors: the role of concentrated market power in driving poor consumer outcomes. Highly concentrated markets are less competitive. That can mean higher prices, weaker consumer choice and reduced pressure on firms to improve outcomes for customers.

We see this most clearly in Australia's supermarket duopoly. The ACCC's 2024 supermarket inquiry identified persisting concerns about market concentration, weak competition and inadequate price transparency. It recommended a range of reforms to improve transparency and to strengthen competition within that sector. The government has acted on some of those recommendations. The Food and Grocery Code of Conduct has been made mandatory. The government is consulting on stronger unit-pricing rules to address practices like shrinkflation. Additional ACCC funding has been provided to pursue misleading pricing practices, and, from 1 July of this year, new regulations relating to excessive supermarket pricing will come into effect. But these measures are still focused on price transparency rather than the underlying uncompetitive structure of a highly concentrated market.

The ACCC's inquiry pointed to the significant market power held by the two dominant supermarket chains. It noted that Coles and Woolworths account for two-thirds of supermarket sales in this country, and yet the government remains reluctant to pursue the reforms that would generally require it to confront entrenched market concentration. The Prime Minister has looked away from calls for stronger anticoncentration measures, including divestiture powers as a last-resort remedy against entrenched anticompetitive conduct. The supermarket industry, let's remember, is the area where the government has been most willing to act.

The government still has not addressed excessive concentration in our insurance markets. It hasn't addressed energy retail margins. It hasn't addressed the broader conditions that have allowed essential goods and services to become significantly less affordable while corporate profits in those sectors have remained consistently strong. We've seen this in the government's reluctance to adopt any general economy-wide prohibition on excessive pricing or price gouging.

Unlike the EU, the UK, Canada, South Africa, India and several states of the USA, Australia continues to rely on consumer protection provisions rather than direct price regulation, and we saw the consequence of this approach in recent months in which Australian fuel prices have outpaced international markets amid reports that more than 500 specific allegations of price gouging had taken place. In response to that global fuel crisis, the Prime Minister promised that the ACCC would take action against overcharging service stations, but, as Allan Fels, the former head of the ACCC, has noted, the commission actually has no real power to do anything about price gouging—a fact that was confirmed when I asked the Treasurer about that in this place.

Price gouging will only be illegal in relation to supermarkets going forward, and even that prohibition hasn't yet come into force. Encouragingly, the government has increased ACCC funding to pursue misleading pricing practices by $30 million, and that is welcome. The regulator has to be properly equipped to protect consumers and to enforce the law. But stronger enforcement against misleading pricing is not the same thing as addressing the underlying concentration of market power and price controls in essential sectors. A regulator can prosecute misleading discounts while the structural conditions that weaken competition and sustain high prices remain unchanged.

Australians deserve honesty about what the government is doing and about the scale of the problem that we are facing. When people are making choices between heating and eating, between renewing their insurance and paying their rent and between filling a prescription or filling a tooth and buying their groceries, they deserve more than this bill, and they deserve more than the other measures that this government has undertaken.

Presenting legislation like this as a major breakthrough for consumer protections risks understating how serious that crisis has actually become. The legislation mandates a ministerial review of the subscription contracts regime after two years, and I welcome that review. I expect that it will identify further shortcomings in both the scope and the enforcement of this legislation. I hope that the parliament approaches those findings then with greater ambition than it is showing today.

I support this bill because the protections that it introduces are preferable to the status quo. Consumers will be better protected with these reforms than they would be without them. But I will not join the government in presenting this legislation as meaningful, significant consumer protection legislation. This is modest reform, in a narrow area of consumer law. The problems it leaves unresolved are larger, more consequential and much more urgent than the problems that it addresses.

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